It is not only in France that we talk about presidential elections. But unlike in France, candidates in South Korea have made cryptocurrencies a key campaign issue. And yesterday’s winning candidate, Yoon Suk-Yeol wants to deregulate them. What does this mean for the future of the industry?
In South Korea, the future president wants to deregulate cryptocurrencies
Yoon Suk-Yeol has made a name for himself as a particularly conservative and controversial candidate, to the point where he is sometimes referred to as the “Korean Trump.” But unlike the former U.S. president, the future president of South Korea is pro-cryptocurrency.
The election was close, with Yoon Suk-Yeol coming in first ahead of opposing candidate Lee Jae-Myung by only less than one percent. Unusually for a presidential debate, crypto-currencies were particularly mentioned by both men, who adopted “crypto-friendly” postures in an effort to win back votes from a portion of young voters.
South Korea is particularly open to cryptocurrencies. A study released in 2021 indicated that about 10% of the country’s residents had invested in crypto assets in the first half of the year. There are also large-scale exchange platforms there, such as Upbit, Bithumb and Coinone.
Current regulation is rather strict
The current South Korean regulations are strict, especially for exchange platforms. Faced with the new measures, the majority of them have been forced to close their doors in 2021. On the investor side, identity verification measures (KYC) have been strengthened, and suspicious transactions are reported to the relevant authorities.
Taxation is also severe. From 2023 onwards, people earning more than 2.5 million Korean Won (KRW), which is about €1,840 at the current rate, will be taxed at 20%.
However, the current government wants to develop certain sectors. The Ministry of Science and Information Technology and Communication announced for example the release of 233.7 billion won to promote the development of metaverse. The Korean regulator also confirmed that regulation of NFTs is not a goal at this time.
New president expected to ease regulatory framework
For his part, Yoon Suk-Yeol made deregulation of cryptocurrencies a campaign issue. He believed that the current regulations could be “detached from reality and unreasonable.” Easing such measures would, he said, unlock the “unlimited potential of the digital asset market.”
In his program, he proposed raising the cap on crypto asset gains at which investors begin to be taxed. The future president also wants to attract “unicorns,” which are crypto startups valued at more than $1 billion.
However, Yoon Suk-Yeol does not forget the criminal side: he wants to take measures so that illegally obtained cryptocurrencies are confiscated, and returned to the victims. It is unclear how this will be done, however, as these assets are particularly difficult to seize.
The controversial new president of South Korea is therefore banking particularly on the field in the coming years. This should confirm the country’s place in the crypto ecosystem, and potentially attract major players in the sector.
